Making Tax Digital for Income Tax for Individuals Full Checklist

2. Work out your qualifying income

☐ Include self-employment income (gross, before expenses).

☐ Include property income (your share if jointly owned).

☐ Exclude:

o Employment (PAYE) income.

o Partnership income (unless disguised investment management fees apply).

o Dividends and savings interest.

o Qualifying care relief, basis period transition profits, trust income, etc.

☐ Apply UK tax residence rules when including/excluding foreign income.

3. Check your start date

☐ If qualifying income > £50,000 based on 2024–2025 tax return → Start MTD from 6 April 2026.

☐ If qualifying income > £30,000 based on 2025–2026 tax return → Start MTD from 6 April 2027.

☐ Await HMRC confirmation letter after submitting your return.

4. Prepare your compatible software

☐ Select software that:

o Creates, stores, and corrects digital records.

o Sends quarterly updates.

o Submits your final tax return.

o Supports all relevant income sources (self-employment, UK property, foreign property).

☐ If using spreadsheets, ensure you have bridging software.

☐ If your accounting period is 1 April–31 March, confirm the software supports calendar update periods.

5. Sign up for Making Tax Digital for Income Tax

☐ Ensure:

o Up-to-date personal details with HMRC.

o UK resident status.

o National Insurance number.

o No outstanding tax liabilities.

☐ Collect required information:

o Business name, start date, address, and type.

o Accounting method (cash or traditional).

o Accounting period (standard or calendar).

☐ Use your HMRC online services account or let your agent sign you up.

6. Create and maintain digital records

☐ Create digital records of:

o Self-employment income and expenses.

o Property rental income and expenses.

☐ Keep original invoices, receipts, and documents (digitally or physically).

☐ If using bridging software, ensure digital links are maintained (no copy-paste).

7. Send quarterly updates

☐ Prepare quarterly updates covering:

o 6 April–5 July (Deadline: 7 August)

o 6 April–5 October (Deadline: 7 November)

o 6 April–5 January (Deadline: 7 February)

o 6 April–5 April (Deadline: 7 May)

☐ Alternatively, opt for calendar periods (1 April–30 June, etc.).

☐ Send even if no income/expenses (“nil returns”).

8. Adjust your business income at year-end

☐ After sending your 4th quarterly update:

o Apply tax adjustments (e.g., disallowable expenses).

o Apply accounting adjustments (e.g., accruals, prepayments).

o Adjust for 1–5 April income if using calendar periods.

o Claim reliefs and allowances (e.g., capital allowances, Rent a Room relief).

9. Finalise your Income Tax position

☐ Add other income sources (dividends, savings, employment) into your software.

☐ Submit your full Self-Assessment tax return via compatible software.

☐ Submit by 31 January following the end of the tax year.

☐ Confirm the information is accurate and complete.

10. Stay compliant with record-keeping and payments

☐ Keep digital records for at least 5 years after 31 January deadline.

☐ Pay Self-Assessment tax bill on time to avoid penalties.

☐ Manage any changes:

o Add or cease income sources via HMRC online account.

o Adjust payments on account if needed.

o Amend returns via HMRC or through contacting support.

⭐ Other Situations to Monitor

• If you start a new business after signing up → Include it from next Self-Assessment year.

• If you jointly let properties → Choose whether to submit full or simplified expenses in quarterly updates.

• If your turnover crosses £90,000 → Apply full digital categorisation requirements.

Summary

Step Key Action

1 Confirm if you need to sign up

2 Calculate qualifying income

3 Identify your MTD start date

4 Choose MTD-compatible software

5 Sign up for MTD

Step Key Action

6 Keep digital records correctly

7 Send quarterly updates

8 Adjust and finalise income

9 Submit tax return

10 Maintain record-keeping and payments compliance